MPs demand inquiry into the power of two

Tomorrow the world ... Coles and Woolworths are expanding aggressively.

National Party MPs are calling for a parliamentary inquiry into the powerful hold supermarket giants have on fruit and vegetable producers.

They have accused supermarkets of "picking off growers one by one" and squeezing farmers on prices at the same time as rural consumers are paying more than they should for food.

The federal member for Riverina, Kay Hull, said an inquiry was vital.

"My growers cannot collectively bargain with Woolworths because that's deemed to be anti-competitive, yet Woolworths can pick off my growers one by one, offering them nothing, and that's not anti-competitive," she said.

Many farmers and small retailers were disappointed that the 1999 Baird inquiry into the retailing sector had not led to significant reforms. It recommended a fresh review of the sector this year, but the Federal Government has not committed itself to do this.

The Nationals' De-Anne Kelly joined calls for a second inquiry, saying the situation in her north Queensland electorate of Dawson had significantly deteriorated since the Baird inquiry.

"There is simply no doubt that the market power in Australia is greatly skewed and big business has become even more arrogant than they were before. It's not just that they make life tougher for the smaller businesses, but I now see them attacking the ACCC [Australian Competition and Consumer Commission], who are really the only hope small business has."

The chairman of the ACCC, Allan Fels, said the watchdog was monitoring the Coles and Woolworths expansion. "The commission would take an interest in any acquisitions of existing supermarkets," he said.

The aggressive move into the liquor market by Coles and Woolworths had also caught its eye, he said.

"The commission is keeping a watch on the liquor retailing industry and has examined a number of acquisitions by Woolworths and Coles to determine whether they may breach the [Trade Practices] act."

Professor Fels said that, so far, no acquisitions had been found to breach the act. He has made a series of recommendations to the Federal Government's current review of the act, which he said could be improved to help protect competition in the sector.

A spokeswoman for Minister for Small Business, Joe Hockey, said he did not see a need for a fresh inquiry into the supermarkets until the outcome of the Government's review of the act was known.

However, Peter Webb, the NSW member for Monaro and a National, said a federal inquiry into the impact of the supermarket duopoly on regional consumers as well as growers had become imperative.

He recently compared the prices of groceries between two Woolworths stores, one in Cooma (a town with just two supermarkets, both Woolworths) and the other in Queanbeyan, which also has a Coles, an Aldi, and Canberra's shopping centres nearby.

Mr Webb found that prices paid in Cooma were consistently between 6 and 10 per cent higher than those in Queanbeyan.